Credit repair is a frustrating process that involves patience, endurance and perseverance. Many companies advertise the ability to repair your credit overnight, or within a few short days. The reality of their solutions is a temporary fix at best. The problems on your credit report are not truly resolved and they will reoccur later. You can repair your credit yourself, for free, with permanent results.
Dispute
Go over your credit reports thoroughly, identifying any incorrect information. It is possible to find accounts that aren't even yours, or account information that doesn't reflect accurate payments or balances. All information on your reports must be accurate under the Fair Debt Collection Practices Act (FDCPA). Write letters to the credit bureaus disputing any information you believe to be incorrect. Include copies of credit card statements or any proof to back up your claim.
Validate
Debt collectors are required to provide proof that you owe the debt they are trying to collect. Under the FDCPA, any collector who cannot validate a debt must remove it from your credit report. An account may show up on your report that originally belonged to a creditor you had an account with. Even though you're aware that the account likely belongs to you, send a letter requesting validation. Collection agencies should be able to provide you with documentation from the original creditor such as account statements and documentation proving they have the right to collect on the account. Collection agencies often sell accounts to one another after a period of time; it's not unusual for inaccurate information to appear on your reports. Know which collectors are legally allowed to collect the debt, to avoid paying someone with no authority. It is also possible that a collector will be unable to validate and will remove the account to avoid the possibility of legal ramifications.
Negotiate
Debt collectors buy accounts for pennies on the dollar and then attempt to collect the full balance from you. If a collector has properly validated an account, offer a settlement. Paid collections do not increase your credit score, so make your settlement contingent on their removal of the account entirely from all credit reports. Make sure you obtain their agreement in writing prior to sending payment, and never pay over the phone or with a personal check.
Complain
When debt collectors do not respond to your requests for validation, they are violating federal law. For some collection agencies, complaints through the Better Business Bureau (BBB) or your state's Attorney General's office may prove fruitful. File complaints and don't be afraid to follow up. Collectors will be given the opportunity to respond, so it's possible that you may be able to correspond back and forth, especially through the BBB. If the collector has failed to validate the account, the only reasonable remedy is for them to remove it from your reports. Do not back down, even if you have to ask several times. Your persistence will often prevail; just remember to keep copies of all correspondence.
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